Transcript

Damien Carrick: Hi, welcome to the Law Report. Ahead, patent trolls; have they arrived here in Australia?

But first to the Middle East. This week in Washington the stalled Palestinian-Israeli peace talks resumed after a hiatus of three long years. On the big issues like the status of Jerusalem, Jewish settlements on the West Bank, Israel's right to security, and the right of return for Palestinian refugees, the parties remain deeply divided.

But at a meeting which took place in Sydney earlier this week there was another coming together aimed at building trust, and that engagement centred around commerce. Later this year the Jerusalem Arbitration Centre, or JAC, will open its doors. It is intended as a neutral forum that can resolve trade disputes between Israeli and Palestinian companies.

Retired Major General Oren Shachor is the president of the International Chamber of Commerce Israel. Now a leading business figure, during his military career he served as the commander of the Intelligence Corps and was also the governor of the West Bank in Gaza.

Mazen Qupty is a leading Palestinian lawyer. Mazen is an Israeli citizen who lives in Jerusalem. He's the head of the ICC Palestine legal team. Both men are currently in Sydney to promote the JAC. You might not imagine that Palestinians and Israelis do a lot of trade, but according to Mazen Qupty in fact both sides are deeply enmeshed.

Mazen Qupty: The amount of trade between Israel and the Palestinian territories is between $4 billion and $5 billion a year. It's a huge amount of money, a huge number of commercial transactions between Israeli companies and businessmen and Palestinian companies and businessmen.

Oren Shachor: It's a huge interaction.

Damien Carrick: And from the West Bank perspective this is a crucial economic relationship. What about for Israel? Is this an important commercial relationship, Oren Shachor?

Oren Shachor: First of all it's a huge number of trade, it's from water to electricity to trade of SMEs and many, many, many things. We are talking about a trade of millions of people doing it. So the whole story is that we are trying to do it as a bridge, commercial yes, business yes, fighting no. And if you ask me, first of all now it's the only joint venture that we are sharing with the Palestinians. Secondly, it can be the light that can light the process of peace between the parties, especially now when the Secretary of State trying to carry this message of negotiation and peace. Again now after a long, long break, that's the story. And we are, in this JAC, in between.

Damien Carrick: Let's come to some of those bigger-picture issues in a moment because is wonderful to have a positive story coming from this region about person-to-person and company-to-company contact. In terms of what the Palestinians export to Israel, what are some of the export products, Mazen?

Mazen Qupty: A lot of it it's a lot of Palestinian workers who do work inside Israel. There is a lot of food products which also goes from the West Bank to Israel. There is a lot of small industry that most of the products goes to Israel. The amount of the exports from the West Bank, and sometimes it was also from Gaza, to Israel is only I think something like one-sixth or one-seventh of the amount of the products and services that moved from Israel to the West Bank.

Damien Carrick: So it's an uneven commercial relationship but a crucial one.

Mazen Qupty: Totally uneven. And we in JAC, we are not coming to solve the big problems, we are trying to give a tool for Palestinian-Israeli businessmen, a tool that will make their life easier, will help them to have more of this kind of relation.

Damien Carrick: Let's talk about what happens right now when there is a trade or commercial dispute between an Israeli and a Palestinian company. How are those disputes resolved and what are the problems with the way that they are currently resolved?

Oren Shachor: I want to mention that until now part of the trade, perhaps most of the trade, we are using cash money because of the problem that you can invest and lose your money very quickly. And the whole idea is, again, to double the scope of trade and not only to use the cash money but to use guarantees, to use cheques and to use all kinds of coins that you are using during trade so it can not only double the scope but can make our lives more easy. And this is the idea of the JAC, the arbitration, that's the solution of arbitration, to meet in the middle, to solve the problem very quickly in a very clear way, to see that enforcement will be clear-cut, and you can get back your money if you invest something. And to see that businessmen on a daily basis can communicate and to do it in a way that they will be happy and not angry.

Mazen Qupty: Let me say something here because I think it's very important. I think the major thing between both sides is the lack of trust. There is actually no trust. For a Palestinian businessman, if he wants to sue the Israeli side, he has to go to Israeli courts. Actually all the system, it's an Israeli judge, it is the Hebrew language, it's Israeli law, all the system is an Israeli system and he doesn't have trust on this court system.

From the other side, for the Israeli, he actually cannot sue the Palestinians in the West Bank, and if he sues him in Israel and he has a judgement in his hands he actually cannot enforce this judgement in the West Bank. So at the end of the day neither side are happy with the situation. And because of this lack of trust, as Oren said, most of the people using the cash money or they have to give very strong collaterals like bank guarantees and such, which really minimises the amount of transaction. And JAC is trying to give a good alternative.

Damien Carrick: Let's talk about the new Jerusalem Arbitration Centre. It's created as a forum to resolve these sorts of disputes and it's very much apolitical, it is the brainchild of people like yourselves, of the business community, not of governments. And you're going to be using arbitration or mediation as an alternative to going to court. And will these arbitrators and mediators…

Oren Shachor: Arbitration, less mediation now.

Damien Carrick: Will these arbitrators and occasionally mediators, will they come from a third country or a third jurisdiction?

Mazen Qupty: According to the JAC rules, arbitration rules, if it's a sole arbitrator it has to be not a resident of Israel or the West Bank or Gaza, which means it has to be an international arbitrator. And if it's a three arbitral tribunal, so the president of this tribunal has to be also international. So actually we are giving both sides, the Israeli side and Palestinian side, an international figures, and an international level of arbitration, which makes what we are offering both sides very, very credible.

Taking into account also the involvement of the ICA, the International Court of Arbitration from Paris, which is very much involved in this project, that will give also better credibility to such an institution, and that will no doubt attract a lot of Israelis and Palestinians to come and to try to solve their problems inside this institution.

Damien Carrick: And will the determinations of the arbitrator be enforceable? Will the courts on both sides of the wall enforce its awards?

Mazen Qupty: I think yes. We chose East Jerusalem as the place where the hearing of arbitration is going to take place, and we choose East Jerusalem because there is a special status to East Jerusalem. The Israelis, they annexed east Jerusalem in 1967, and they consider East Jerusalem as part of Israel. This is refused by the Palestinian side. Politically it is not part of Israel, but according to Israeli law it is part of Israel. Therefore, any judgement, any award that will be given by the arbitrators can be approved by the Israeli courts, and after it is approved as local arbitration, after it is approved it can be implemented and enforced in the Israeli side.

For the Palestinian side, East Jerusalem is unoccupied territories, it's not part of Israel, and some of the people consider it as part of the Palestinian areas, the other part say no, it is not a part of the Palestinian areas. I'm talking legally, not politically, but politically no doubt it is part of the Palestinian areas. But legally it is considered any arbitration given between an Israeli company or a Palestinian company, in East Jerusalem it is considered an international arbitration that can be approved by a court in the West Bank, and after it's approved it can be enforced, as any other court judgement in the West Bank.

Damien Carrick: What do you see as the potential for the commercial relationship? How big could it get? How big and how deep could it get?

Oren Shachor: I think it can double the scope of transaction, by all means. If you would be sure about your money we can invest more…I'm talking about the Israeli side and the international side. It's not only the West Bank, I'm talking also about Gaza and I'm talking from agriculture to building cities and from water to oil and gas and energy and other fields, and again, invest in high tech, and we are doing it together. So it's a lot of money and it can bring us to a different place, talking about the civilians' life and talking about the political life.

Mazen Qupty: I think you cannot separate commerce from politics, and whenever the political situation is getting better, so the commerce is growing. And no doubt…I mean, Palestinians are looking for an independent state, and hopefully after the Palestinians will have their independent state in the West Bank, in Gaza, maybe the commerce will be bigger and it will be because both parties want this relation, not because…part of the relation today is imposed on the Palestinians. I can just give an example. For example, electricity and water and such things, this is something that Palestinians are buying it from Israel because they have no other choice, but if they were an independent state they may buy electricity from Jordan or from Turkey or from I don't know where from. So when the political situation is more clear, I think the amount of commerce and trade between Israel and Palestine will be clearer, and I think it will be better because then it will be free trade and free commerce.

Damien Carrick: Do you see that this person-to-person and commercial-entity-to-commercial-entity, these links can have an impact on the political dimensions of the relationship?

Mazen Qupty: It can help, but at the end of the day the decision is in the hands of the politicians. Again, it's in the hands of Mr Obama, the president of the United States, Prime Minister Netanyahu, and President Mahmoud Abbas. And these three gentlemen have to take tough decisions and to get to an agreement. Without that we are lost.

Oren Shachor: Yes, but it can simplify the relationship and it will be good news, and if you ask me now when we start the negotiation, the political negotiation, it can make our lives easier. And talking about good business investment and good projects, as Mazen mentioned, from energy to others, it's good news, and this JAC can do it.

Mazen Qupty: Actually you know, this is a very attractive project. This is one of the very, very few and may be the sole project between Palestinians and Israelis, and it is really very attractive. I can say it's very sexy. If this project will succeed, and I think it will, I hope it will, it's going to be a very important project, a very important example to show how Israelis and Palestinians when they are serious, when they want to solve problems they can sit together and negotiate and then get to an agreement and implement this agreement. And I do believe that many people all over the world want to help both sides to really get to there.

Damien Carrick: Mazen Qupty and Oren Shachor, thank you both very much for speaking to the Law Report.

Oren Shachor: Thank you.

Mazen Qupty: Thank you.

Damien Carrick: Both Mazen and Oren addressed a meeting at the Sydney offices of Clayton Utz, organised by senior associate Adam Butt.

Damien Carrick with you, this is the Law Report on RN. Do visit us online at abc.net.au/radionational where you can find tonight's stories, transcripts, and a heap of previous episodes. And you can also find the Law Report separate stories podcast on iTunes.